In Nagorno-Karabakh Fight, Serbian-Made Rockets And Links To Blacklisted Dealer – Analysis

In the latest outbreak of fighting over Nagorno-Karabakh, Armenian forces have fired rockets made in Serbia of a type previously bought by a firm linked to US-blacklisted arms merchant Slobodan Tesic.

By Sasa Dragojlo, Ivana Jeremic and Hamdi Firat Buyuk

Serbian-made arms, of a type previously sold by the state to a private company linked to a Serbian arms dealer blacklisted by the United States, have been used in renewed fighting between Azerbaijan and Armenia over the disputed region of Nagorno-Karabakh, BIRN can reveal.

On September 28, Azeri Defence, a defence industry magazine, published photographs of the remains of a missile that it said was fired by Armenian forces from BM-21 Grad rocket launchers at the Azeri city of Horadiz, just outside breakaway Nagorno-Karabakh.

A marking that reads ‘KV 05/19’ indicates that the G-2000 long range rocket was produced by the Serbian state-owned arms manufacturer Krusik, in the town of Valjevo, in 2019. The marking ‘EDePro’ shows that the rocket motor was made by another Serbian company, Belgrade-based EDePro.

According to documents obtained by BIRN, in 2018 Krusik signed a contract for the same type of 122-mm caliber G-2000 long range rockets with Vectura Trans, a private arms company connected to arms merchant Slobodan Tesic.

The US imposed sanctions on Tesic in 2017, accusing him of bribery and violating arms embargos. It added Vectura Trans in late 2019, alleging that Tesic used the company – founded the year he was blacklisted – to dodge sanctions on his arms dealing.

Vectura Trans signed a contract with Krusik in 2018 to buy, among other weapons, 10 G-2000 rockets worth a total of $34,000. According to the documents seen by BIRN, the weapons were destined for Armenia.

‘Double game’

Asked to confirm which company received the export permit for the weapons, Serbia’s trade ministry, which is responsible for arms exports, told BIRN it would respond but never did. Vectura Trans, Krusik and EDePro also did not respond to requests for comment.

However, in late July, Trade Minister Rasim Ljajic said that Serbia had issued 19 permits for arms exports to Armenia since 2017, when such exports began. Fifteen were issued to Vectura Trans, three to Partizan Tech and one to state-owned Zastava Oruzje. Like Vectura Trans, Partizan Tech is under US sanctions for working on behalf of Tesic.

Earlier the same month, the Serbian weekly NIN reported that Vectura Trans had delivered weapons to Armenia from three Serbian state-owned manufacturers, including Krusik, just a few days before another flare-up over Nagorno-Karabakh.

While there is no mandatory embargo on arms exports to Azerbaijan or Armenia, under Serbian law the end-user certificate – which should specify the ultimate recipient of the arms – can be rejected if the weapons “enable the outbreak or continuation of armed and other conflicts in the country of final use.”

Rashad Suleymanov, editor-in-chief of Azeri Defence, said the nature of the weapons indicated a warming of relations between Serbia and Armenia.

“These missiles are modern, multiple launch rocket systems and have a very long-range showing that Serbian government decided to support Armenia and the separatists [in Nagorno-Karabakh],” Suleymanov told BIRN. 

“Serbia and Azerbaijan have good economic and political relations and this alone shows that Serbia plays a double game.”

‘Voluntary’ arms embargo

The UN and the Organisation for Security and Cooperation in Europe, OSCE, imposed an arms embargo on Azerbaijan in the early 1990s over the fight for Nagorno-Karabakh.

The UN has since lifted the embargo but the OSCE, which monitors the shaky ceasefire in the disputed region, kept it in place. The OSCE embargo, however, is of a voluntary, multilateral nature and many OSCE participating states have supplied arms to both Armenia and Azerbaijan over the past three decades.

Serbia’s Armenia arms trade jeopardises Azeri relations

Diplomatic ties between Serbia and Azerbaijan have deepened over the past decade, starting with the unveiling of a monument to late Azeri leader Heydar Aliyev in a prominent Belgrade park in 2011. 

In May 2018, Serbian President Aleksandar Vucic and his Azerbaijan counterpart, Ilham Aliyev, son of Heydar, signed a strategic partnership agreement and a number of trade deals.

Baku has bristled, however, at Serbia’s arms sales to its arch foe Armenia. Nagorno-Karabakh broke away from Azerbaijan with the collapse of the Soviet Union in the early 1990s and is controlled by ethnic Armenians. Fighting has flared a number of times since the war but the current exchanges are the worst in years.

In July, the Azerbaijan foreign minister expressed “deep disappointment and confusion” over the transfer of Serbian mortars and other weapons to Armenia, saying they had been used to attack Azerbaijan police.

The trade “casts doubt on the friendly relations and cooperation between the two countries at the highest level,” Azerbaijan Deputy Foreign Minister Kalaf Kalafov was quoted as telling Serbia’s ambassador in Baku, Danica Veinovic.

In Serbia’s defence, Trade Minister Ljajic said that this year only private companies had exported weapons to Armenia and that Yerevan was not under any sanctions. 

Vucic weighed in on July 31, arguing that Serbia had sold many more weapons to oil-rich Azerbaijan than Armenia.

“They are both friends to us,” he said. “We have sold ten times more weapons to Azerbaijan in the last couple of years.”

Possibly trying to repair the damage, Interior Minister Nebojsa Stefanovic visited Baku on August 11 to discuss ‘security matters.’

Sanctions no obstacle to Serbia’s dealing with Tesic-linked firms

For years considered the biggest arms dealer in the Balkans, Tesic spent a decade on a United Nations black list, between 2003 and 2013, for violating a Liberian arms embargo.

According to the US Treasury, which imposed sanctions on him in 2017, “Tesic would directly or indirectly provide bribes and financial assistance to officials” in order to clinch weapons contracts.

Vectura Trans was sanctioned “for being owned or controlled by, or for acting or purporting to act for or on behalf of, directly or indirectly, Tesic”. 

“Tesic utilised Vectura Trans to receive an approved license for exports, to complete arms deals, and to finalise weapons contracts with a foreign government,” the US Treasury said in 2019.

Such findings and the US sanctions, however, have not deterred Serbian authorities from doing business with Tesic.

NIN has reported that companies controlled or owned by Tesic have bought weapons from Krusik at prices lower than those paid by state-owned firms.

EDePro, which jointly produced the G-2000 rockets with Krusik and exhibited them at an arms show in Abu Dhabi in 2017, is predominantly privately-owned. Founded in 1997, it is today run by Branislav Jojic, Milivoje Popovic, Momcilo Sljukic and Slobodan Petkovic, though the state-owned arms company Yugoimport-SDPR also holds a two per cent stake.

Though registered as dealing in “research and development in technical and technological sciences”, EDePro also holds a state permit for export and import of arms and military equipment. 

In May 2002, when Serbia was part of rump Yugoslavia alongside Montenegro, the US said it had evidence that a network of Yugoslav companies had been supporting a missile program being pursued by then Libyan leader Muammar Gaddafi. 

The companies were identified as Yugoimport SDPR, Brunner and Infinity. EDePro’s Jojic was identified as representing Yugoimport SDPR. He also worked previously for Infiniti and was one of the founders of Brunner, considered a forerunner of EDePro in terms of its development approach.